Other Voices: Obama makes the case for a $10.10 minimum wage

"No one who works full-time should ever have to raise a family in poverty." That was the message President Barack Obama brought from Tuesday night's State of the Union address to a Costco warehouse in Lanham, Md., on Wednesday morning, and it's hard to believe that there's much disagreement on that sentiment.

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By The Baltimore Sun

recordonline.com

By The Baltimore Sun

Posted Feb. 1, 2014 at 2:00 AM

By The Baltimore Sun
Posted Feb. 1, 2014 at 2:00 AM

» Social News

"No one who works full-time should ever have to raise a family in poverty." That was the message President Barack Obama brought from Tuesday night's State of the Union address to a Costco warehouse in Lanham, Md., on Wednesday morning, and it's hard to believe that there's much disagreement on that sentiment.

Yet based on the reaction from congressional Republicans, one would think that President Obama's decision to issue an executive order raising the minimum wage for new federal contractual workers to $10.10 per hour from the current $7.25 was tantamount to socialism. And that's about the nicest thing his Republican critics had to say in the wake of Tuesday's speech, including those who claim he's violating the Constitution (as if offering a modest wage increase was on-par with the internment of Japanese-Americans, the freeing of the slaves or other far more ambitious actions presidents have taken by executive order in the past).

Income inequality exists, and it's been getting worse for decades. That's a fact. There are any number of reasons for this well beyond the scope of government, as Obama has pointed out, including the loss of jobs that required relatively few skills but paid decent wages.

The president likely chose a Prince George's County Costco to make his first appearance after his speech for two reasons. The first is that Gov. Martin O'Malley and the General Assembly are now involved in a debate over the Maryland minimum wage, with a push to elevate it to the same $10.10 per hour.

But the second — and one that Republican critics should note — is that Costco is prime example of what happens to an employer in the highly competitive, price-sensitive big-box discount retail market when wages are increased. The result is that everybody wins — workers, customers and shareholders.

Costco is not only a highly successful company, but also has prospered by paying higher wages and offering better employee health coverage than its competitors. Hourly workers in its 400 stores reportedly earn not $10.10 per hour but average $20.89 per hour (before any overtime is added in). Meanwhile, employees are expected to contribute a substantially smaller percentage of their health insurance plan's cost than is the norm.

Yet Costco's labor costs are relatively low, at least when compared to total sales. In part, that's because the higher wages attract a more stable, harder working, more responsible and loyal workforce.

America should be home to the American dream. Yet serious questions have been raised recently about how much social mobility exists in this country. If you are born poor today, you are about as likely to remain poor as you were 40 years ago, according to a study released earlier this month.

President Obama probably can't get a minimum wage through a Congress so dysfunctional that the opposing party offered four separate responses to his single State of the Union address instead of the customary one. His promise to do all that he can to boost economic opportunities, whether by law or by executive order, is about the best that can be offered at the moment.